Patrick Smith’s Post

Occidental Petroleum (Oxy) is set to release its Q1 2024 figures after the market closes on 7/May (Tuesday).  The oil company’s revenue and earnings are expected to fall in Q1, a trend seen across the industry due to falling oil and gas prices. Revenue is anticipated to drop by 6.6% QoQ and 7.3% YoY to USD 6.7 billion, with an estimated EPS of USD 0.58, indicating a 21.6% QoQ and 46.8% YoY decline. The company has gained popularity, largely due to Warren Buffett's interest. Berkshire Hathaway currently owns 28% of Oxy's outstanding shares. Other than Buffett’s bullish outlook for the firm, it has other things going for it that piqued investor attention. For instance, its lower-carbon energy solutions platform, Oxy Low Carbon Ventures. The company plans to invest USD 600 million this year to develop and expand the capabilities and operations of its low-carbon energy solutions platform. Oxy also formed a joint venture with BlackRock, focusing on providing lower-carbon energy solutions. BlackRock will fund USD 550 million (50%) of STRATOS' development costs. Oxy anticipates the carbon capture and sequestration industry to become a USD 3 trillion to USD 5 trillion global industry in the coming decades. Coming to its oil and gas operations, Oxy agreed to acquire CrownRock Minerals, LP for USD 12 billion last year, aimed at strengthening its position in the Permian Basin. However, regulatory delays have pushed the deal's closure to Q2 2024 from the expected Q1 2024. Oxy expects to increase its annual free cash flow by USD 1 billion within the first year of acquiring CrownRock Minerals, LP, based on an assumed oil price of USD 70 per barrel (its price point at the time of the deal). With crude oil now above USD 80 per barrel, the acquisition could potentially generate even higher cash flow. The company's debt, standing at USD 18.5 billion at the end of 2023, is another area of focus. It aims to reduce its debt by USD 4.5 billion by the end of 2024, primarily through asset sales and increased cash flow.

Mish’s Daily: Technical Monday-Occidental Petroleum OXY September 30, 2024 It is no secret that Warren Buffet, who has sold a lot of shares in Bank of America and Apple, continues to hold Occidental Petroleum. With the most recent $435 million purchase in June, Berkshire Hathaway now owns about 28.8% of shares outstanding Buffett wrote, "We particularly like its vast oil and gas holdings in the United States, as well as its leadership in carbon-capture initiatives." We do not follow anyone blindly, but there are a few reasons why we are now looking at Occidental OXY. The price of West Texas Crude Oil has recently sold off.However, it is holding the last swing low at around $65 a barrel. Now, a move over $70 would be compelling as the futures chart would indicate a firmer bottom is in place for oil. While I have the Daily chart posted here, on the weekly chart, the price of OXY is sitting on the 200-week moving average and has now for the last 4 weeks. On the monthly chart, OXY is holding the 80-month moving average or the 6–8-year business cycle low. That means OXY should hold around $50 per share to be good. However, we do not simply buy stock because of who owns it or because it looks cheap. This is where the Daily chart looks interesting as a timing mechanism. Last week OXY made a new multi-year low. The last time this traded at these levels was in March 2022. Nonetheless, OXY did confirm a potential reversal bottom with the action Friday and today. Now, we want to see OXY gain leadership versus SPY. And we want to see the momentum hold firm from current levels. Plus, remember a move higher in the futures in oil will help as well. https://lnkd.in/ggJ9ssA5

ExxonMobil beat analysts’ estimates as higher oil production from the US Permian Basin helped cushion a drop in crude prices and tightening refining margins. Exxon earned $1.92 a share in the third quarter, more than the $1.87 median estimate among analysts surveyed by Bloomberg. Chevron and Shell also turned in better-than-expected performances. #EnergyConnects #energynews #energyindustry #news #oott #oilandgasindustry

Ecopetrol Pulls Out Of Deal to Buy Oxy’s CrownRock Minerals, LP Assets Occidental Petroleum has disclosed that Colombia’s Ecopetrol S.A. has pulled out of a deal to buy a 30% stake in Occidental’s CrownRock assets. Last year, Occidental announced a deal to acquire CrownRock and its significant Permian Basin assets in a cash and stock deal valued at ~$12B. In May, Occidental reaffirmed plans to sell $4.5B-$6B of CrownRock assets within 18 months of closing the purchase, set to be completed by August. Occidental hoped to use part of the proceeds from the Ecopetrol deal to pay down debt, which had ballooned to $18B at the end of Q1. https://lnkd.in/e-dCWStr

"Occidental Petroleum Corp. has reported $718 million in net income for the first quarter, down by $265 million compared to the same three-month period a year ago due to weaker global oil prices and lower domestic petroleum volumes. Despite the fall, which becomes steeper by prior-quarter comparison, the Warren Buffet-backed integrated energy company beat the Zacks Consensus Estimate of earnings per share by 16.1 percent, helped by lower lease operating costs in the United States." #OXY #Upstream

𝐁𝐞𝐫𝐤𝐬𝐡𝐢𝐫𝐞 𝐇𝐚𝐭𝐡𝐚𝐰𝐚𝐲 𝐁𝐨𝐨𝐬𝐭𝐬 𝐒𝐭𝐚𝐤𝐞 𝐢𝐧 𝐎𝐜𝐜𝐢𝐝𝐞𝐧𝐭𝐚𝐥 𝐏𝐞𝐭𝐫𝐨𝐥𝐞𝐮𝐦 𝐭𝐨 𝐍𝐞𝐚𝐫𝐥𝐲 29% Billionaire Warren Buffett's Berkshire Hathaway Inc. has increased its investment in Oxy Petroleum, acquiring another 2.95 million shares. 𝑯𝒆𝒓𝒆'𝒔 𝒘𝒉𝒂𝒕 𝒚𝒐𝒖 𝒏𝒆𝒆𝒅 𝒕𝒐 𝒌𝒏𝒐𝒘: 1. 𝙉𝙚𝙬 𝙎𝙩𝙖𝙠𝙚 𝘿𝙚𝙩𝙖𝙞𝙡𝙨 Berkshire Hathaway now holds approximately 255.3 million shares, nearly 29% of Occidental's common stock, which is valued at around $15.37 billion. 2. 𝙍𝙚𝙘𝙚𝙣𝙩 𝙋𝙪𝙧𝙘𝙝𝙖𝙨𝙚𝙨 Berkshire paid about $176 million for the new shares in three separate purchases since last Thursday. 3. 𝙍𝙚𝙜𝙪𝙡𝙖𝙩𝙤𝙧𝙮 𝘼𝙥𝙥𝙧𝙤𝙫𝙖𝙡 In August 2022, Berkshire received U.S. regulatory approval to buy up to 50% of Occidental. However, Buffett stated that he had no plans to acquire the company entirely. 4. 𝙎𝙩𝙧𝙖𝙩𝙚𝙜𝙞𝙘 𝙄𝙢𝙥𝙡𝙞𝙘𝙖𝙩𝙞𝙤𝙣𝙨 An acquisition could diversify Berkshire's energy portfolio, including utilities, electricity distributors, and renewable power projects. 5. 𝙊𝙘𝙘𝙞𝙙𝙚𝙣𝙩𝙖𝙡'𝙨 𝙍𝙚𝙘𝙚𝙣𝙩 𝙈𝙤𝙫𝙚𝙨 Last year, Occidental acquired Permian shale oil producer CrownRock Minerals, LP for $12 billion, strengthening its position in the largest U.S. oilfield. 6. 𝙈𝙖𝙧𝙠𝙚𝙩 𝙍𝙚𝙖𝙘𝙩𝙞𝙤𝙣 Occidental shares have seen a marginal increase this year and were up slightly in premarket trading on Tuesday. 𝑾𝒉𝒂𝒕 𝒅𝒐𝒆𝒔 𝒕𝒉𝒊𝒔 𝒎𝒆𝒂𝒏 𝒇𝒐𝒓 𝒊𝒏𝒗𝒆𝒔𝒕𝒐𝒓𝒔? Buffett's continued investment in Occidental Petroleum highlights confidence in the company's future and the broader energy sector. P.S. Repost this update for your network ♻️ Thank you! https://lnkd.in/gRtG96pp

As the world reaches abundance, where developed nations increase energy efficiency and decrease their energy needs, we are reaching a peak with China being the capstone. As China installs more and more solar, and build more and more electric vehicles they reduce their oil imports as well as oil imports for any country that uses solar and EVs. This reduces global demand for oil and the price falls. As the price falls, wells become less economical. Why spend $100 to get an $80 product? Who is paying to subsidize that extraction? This is where global peak oil comes from. Not because we ran out of oil. But because it was more economical to not go and get it. From the fossil fuel perspective they are being crunched on both sides. The ceiling price is synthetics made from negative electricity prices, waste to methane made from landfills, and biological farming waste sources are the high price cap currently. And those prices are decreasing as our need to manage waste increases and technology efficiency increases. But more effectively we are seeing electrification replacing their need with heat pumps and EVs and solar panels, for heat transportation and on the electricity grid. This is because electricity is lower cost and anyone who switches is investing in saving future money, even if it isn’t cheaper today. And as more energy burden is switched from fuel to higher systemic efficiency electric, the ripple effects will cut the demand even faster. For example the energy to run the drill, the exploration team’s equipment, the tanker, the offshore drilling platform, the steel pipeline manufacturer, the gas station refuel truck. All of those needs disappear. So with China’s demand for oil retreating, and their exports are able to lower demand around the globe, and alternatives from other oil importing nations learn to make alternatives cheaper than importing, we will see the tail end of the bull whip as an oil exporting country. We have migrated our oil to developing nations who need it, but the number of customers is shrinking as each country hits their development milestone of no oil imports needed. Look to the UK who after 100 years will no longer need coal. Next to follow is gasoline for cars, and then natural gas for everything else. Will there still be some uses? Yes. But nowhere near as economical as electric. Because as you use up a single time use resource it gets more expensive as you have to scrape the bottom of the barrel, after picking the lowest hanging fruit. But a technology decreases in price as we deploy. And by 2030 there will be virtually nowhere in the world where solar isn’t the cheapest energy resource.

Occidental Petroleum's (OXY) share price has dropped 15.5% over the past six months, underperforming peers due to its exposure to commodity price fluctuations and lack of active hedging. While the company benefits from strong Permian operations, increased production guidance, and significant debt reduction, it faces challenges from a competitive market, premium valuation, and declining earnings estimates. https://lnkd.in/gi2Jgnfi

𝙋𝙞𝙥𝙚𝙡𝙞𝙣𝙚 𝘾𝙤𝙣𝙨𝙩𝙧𝙖𝙞𝙣𝙩𝙨 𝙒𝙞𝙙𝙚𝙣 𝙂𝙪𝙡𝙛 𝘾𝙤𝙖𝙨𝙩 𝙊𝙞𝙡 𝙋𝙧𝙞𝙘𝙚 𝙎𝙥𝙧𝙚𝙖𝙙 Limited pipeline capacity from the Permian Basin to the Gulf Coast has significantly widened the price difference between U.S. shale oil in West Texas and Houston. The spread between Midland crude and the Magellan East Houston (MEH) terminal reached up to 74 𝐜𝐞𝐧𝐭𝐬 𝐩𝐞𝐫 𝐛𝐚𝐫𝐫𝐞𝐥 in September, compared to an average of 22 𝐜𝐞𝐧𝐭𝐬 last year. This increase is driven by record production in the Permian and strong export demand due to shortages of light sweet crude from Libya. With pipelines to Corpus Christi operating at 97% 𝐜𝐚𝐩𝐚𝐜𝐢𝐭𝐲 and to Houston at 73%, the price differential is expected to persist until new pipeline capacity becomes available. Enbridge plans to add 120,000 𝐛𝐚𝐫𝐫𝐞𝐥𝐬 𝐩𝐞𝐫 𝐝𝐚𝐲 by 2026, with 80,000 𝐛𝐩𝐝 expected as early as April. Major producers like ExxonMobil and Chevron also boost shale output, further increasing future pipeline needs. #CrudeOil #PermianBasin #PipelineCapacity #OilPrices #EnergyIndustry #GulfCoast #OilExports #EnergyMarket https://lnkd.in/gmvxFD57

Some Canadian energy companies are better placed to weather the precipitous drop in the price of oil. Here's a quick overview of the winners and losers from volatile oil prices according to analysts. WTI was trading Friday at US$70.01 a barrel, down from a year-to-date high of US$86.91. #oil #energy #mining #resources #fuel #oilpatch Suncor Cenovus Energy Imperial Oil MEG Energy Corp. Baytex Energy Corp. #building #buildings #construction #steel #mining #exploration #prospecting #ores #mines #minerals #energy Mining Association of BC Prospectors & Developers Association of Canada (PDAC) BC Regional Mining Alliance CIM | Canadian Institute of Mining, Metallurgy and Petroleum Canadian Association of Petroleum Producers (CAPP) Canadian Energy Executive Association Canadian Fuels Association - Association canadienne des carburants Canadian Natural Resources Limited (CNRL) Canadian Gas Association Canadian Heavy Oil Association